This page does not exist in [x], feel free to read the page you are currently on or go to the [x] homepage. Companies must act now to avoid obsolescence in the future. Environmental Choice New Zealand is the official environmental label body that awards certificates and lists environmentally friendly products for green homes or businesses. In a study of more than 21,000 US households, Nielsen analyzed consumers' attitudes towards various sustainable attributes across 13 product categories. In fact, the majority (73%) of global consumers say they would definitely or probably change their consumption behavior to reduce their impact on the environment. Brands that actively reinforce societal commitment must amplify and socialize their message using multiple sources and distribution channels. In 2018, that number had risen to about 85% . Nielsen, an S&P 500 company, has operations in over 100 countries that cover more than 90% of the worlds population. In fact, an analysis of retail sales data indicated that natural products were seeing growth in otherwise declining categories. In 2015, brands who showed a commitment to sustainability saw sales grow more than 4% globally. 6 takeaways from the worlds biggest cultural policy gathering, Putting Solar Panels On Farms Makes Sheep Happier. Accessed March 02, 2023. https://www.statista.com/statistics/1367681/china-consumers-willingness-to-pay-more-for-sustainable-goods/, Deloitte. This likely depressed the growth numbers, as many brands have become more sustainable over time. To ensure consistent and accurate representation of the U.S. general population 18 years of age and older, data was weighted by the following variables: sex, age, geographic region, race/ethnicity, and education. She's vocal about the fact that it costs a lot more than shirts from a company like H&M specifically because she only uses sustainable goods and ethical practices when it comes to the workers. Green is the new black: why retailers want you to know about their green credentials. 'Global consumer-goods' brands that ignore sustainability increase reputational and business risk' Nielsen's research also found that 66 percent of consumers were willing to pay more for sustainable goods in comparison to 50 percent in 2013. When looking at both Baby Boomers and Generation X, 24 percent across each have significantly changed their behavior towards being more sustainable -- this figure climbs to 32 percent for Millennials. In 2014, 65% of total sales of consumer goods measured globally were generated by brands whose marketing conveyed commitment to social and/or environmental value. it is biodegradable (65%) or made from recycled packaging (60%), when it comes to making a purchase, consumers value durability . Our analysis did not include the term natural (which is ubiquitous but means nothing) or marketing claims related to social causes or charities. Among the 66% of global respondents willing to pay more, over 50% of them are influenced by key sustainability factors, such as a product being made from fresh, natural and/or organic ingredients (69%), a company being environmentally friendly (58%), and company being known for its commitment to social value (56%); sales and coupons didnt even make the top five. Indeed, one recent report revealed that certain categories of products with . Original survey question: How much of a premium are you willing to pay for green consumption (i.e. While attitudes towards sustainability vary between generations, they also vary across countries -- when looking at consumers who have either made significant changes to their purchasing behavior or completely changed their way of living to be more sustainable, Austria leads the way (42 percent), followed by Italy (41 percent), Spain (35 percent) and Germany (34 percent). This statistic displays the share of consumers willing to pay extra for sustainable products in the Netherlands from 2014 to 2020. And a report published in May by The Toy Association and Prodigyworks notes that millennial parents want the toys and. Call me a geek, but I do love a good research report! Nature is worth $44 trillion to the global economy, according to a recent World Economic Forum estimate. Concerned about allegations of greenwashing claiming a product is green when its not many brands are turning to organisations such as Climate Neutral, Foundation Myclimate and members of the Global Ecolabelling Network to legitimise their claims. Notably, those two companies are doing so despite the strident objections of investors who criticized Indra Nooyi and Paul Polman, the former CEOs of PepsiCo and Unilever, respectively, for moving away from their traditional brands. A substantial portion of consumers are currently willing to pay for sustainability, demonstrating that there is a market for mission-driven green companies and why we see a rise in sustainable companies around the world. When it comes to sales intent, commitment to the environment has the power to sway product purchase for 45% of consumers surveyed. Currently, you are using a shared account. For most of the history of the moderneconomy, the sourcing of products didn't even cross the minds of those shopping. Businesses that under-appreciate the need for CSR do so at their peril. Companies must invest, innovate and transform their business models now to protect their long-term profitability and viability. For years, researchers have examined climate-oriented consumption to see if it wins peoples support. Consumers also see themselves as the agents of change, implying that the call to action for companies to adapt has never been more urgent. Reports such as Nielsen Insights suggest the majority (73%) of consumers would change their consumption habits to reduce their impact on the environment, and almost half (46%) would switch to environmentally friendly products. I don't dream of a world full of cheap lip gloss that was tested on animals; I dream of one in which that kind of beauty product is illegal everywhere, period. Paying attention to public opinion on specific brands in the news or on social media. A new study, looking at the sales from 2013 to 2018 of products marketed as sustainable, finds the conventional wisdom isnt true. While the demand for such products remains low, the price remains high. 315-409-9435 To use individual functions (e.g., mark statistics as favourites, set There are several reasons for this. As economists say, as price lowers, our willingness and ability to buy an item increase. A fresh one is out from McKinsey & Company and Nielsen IQ - and the punchline is that making and lire aussi : By comparison, 51% of Boomers (ages 50-64) said that they would pay a premium for sustainable products. "Our sustainability. 76% of Americans would switch their preferred packaged goods brand if they were offsetting carbon emissions. Hence, despite environmental concern and the positive attitude of customers towards sustainability and green products, its estimated the market share of green products will reach only 25% of store sales by 2021. Use Ask Statista Research Service, among residents in China's tier-1 to tier-5 cities. Today, 50 percent of consumers rank sustainability as a top five value driver, said Dr. Andreas von der Gathen, co-CEO of Simon-Kucher. The study also found a large degree of mistrust about companies environmental claims. Green consumption includes more environmentally friendly raw materials, packaging and production methods, lower carbon emissions during transportation and use, and better protection for people involved in production and trade. In a study byHorizon Medias Finger on the Pulse, 81 percent of Millennials expect companies to make a public commitment to good corporate citizenship.. Facebook: quarterly number of MAU (monthly active users) worldwide 2008-2022, Quarterly smartphone market share worldwide by vendor 2009-2022, Number of apps available in leading app stores Q3 2022, Research expert covering e-commerce and FMCG in Greater China, Profit from additional features with an Employee Account. Profit from the additional features of your individual account. Mr Harrison says, however, that customers are becoming more canny. That across the board, consumers are willing to pay extra for one thing: sustainability. While companies are increasingly using environmental claims to appeal to consumers, they also attract greater scrutiny. As a Premium user you get access to background information and details about the release of this statistic. In 2014, less than 30 . Again, younger generations lead the way as higher shares of Generation Z (39 percent) and Millennials (42 percent) are willing to pay for sustainability compared to Gen. X (31 percent) and Baby Boomers (26 percent). Some of the necessary transformation can be accomplished by reinventing legacy products, as Unilever has shown with its sustainable living brands, now delivering 70% of its turnover growth. Jun 27, 2014 The willingness to pay for sustainable products has increased universally since 2011. A willingness to pay more for "sustainable" products. Consumer brands that havent embraced sustainability are at risk on many fronts, says Gstalder. The bottom line is that the corporate world cannot ignore the demands and expectations of Millennials, who are devout in their desire to associate with companies aligned with their values. But nearly 60% are unwilling to pay more money for that eco-friendly product.. Feb 28, 2023. To ensure the most secure and best overall experience on our website we recommend the latest versions of, Internet Explorer is no longer supported. What is the World Economic Forum doing about the circular economy? Voir les partenaires de TheConversation France. Commitment to social and environmental responsibility is surpassing some of the more traditional influences for many consumers. GreenPrint For fifteen years, Rudominer has operated on the front lines and behind the scenes of numerous communications campaigns, providing strategic counsel to public officials, corporations, trade associations, and non-profits. The carbon footprints of the certified products are based on international standards (ISO 14040) and verified by an independent expert. The views expressed in this article are those of the author alone and not the World Economic Forum. This is the result of a representative survey that we commissioned from INNOFACT. Designed by Elegant Themes | Powered by WordPress, 66% of survey respondents are willing to pay more for sustainable goods, up from 55% in 2014, and 50% in 2013. More demand would mean more production and lower unit price costs. Traditional advertising will not work with Millennials. Sustainability-marketed products are growing quickly in almost all CPG categories. For the US, 22 percent of consumers indicate major changes to the behavior, but that number jumps to 55 percent when including those who say theyve at least made some modest changes. Says Gstalder: While marketing good deeds is encouraged and expected by consumers, authenticity and credibility are essential. In Taiwan, for example, where 88% of surveyed consumers said that it is extremely or very important that companies implement programs to improve the environment, there is evidence of a growing trend in natural in personal care. It can be used to help people improve their thinking and decisions. Zach Harris Millennials represent the consumer market of the future, and it behooves corporations to read the tea leaves. Our eBook "What ESG means to you and your consumers in 2022" is designed to help A majority (55%) of consumers are willing to spend extra money in order to purchase environmentally friendly products, though at differing amounts. . Or to remain unmoved by those facing increasingly poor living conditions across the globe. 2023 Nielsen Consumer LLC. We help our clients achieve growth and profit targets by applying practical, evidence-based strategies. I'm willing to pay significantly more to support quality products and human rights, and put my money where my mouth is when it comes to creatingthe world in which I want to live. Weve been on this journey for a while, but the clock is ticking and failure to think through the implications could have long-term consequences for traditional firms., Across industries and countries, sustainability is a significant purchase criterion -- though price and quality continue to dominate. If you have a question youd like an expert to answer, please send it to climate.change@stuff.co.nz. Consumers are trying to be responsible citizens of the world, and they expect the same from corporations. We see the impact of similar sentiment around shower gel, a category where naturals own 10.3% of the value share, and the overall category saw sales decline 0.8%. The hierarchy among drivers of consumer loyalty and brand performance is changing, says Farraj. In 2013, India banned all animal testing, then banned even the import of beauty products that engage in animal testing. Some brands are even moving beyond simply eco-friendly and now seek to claim their products are climate-neutral. For further information please contact: To ensure the most secure and best overall experience on our website we recommend the latest versions of, Internet Explorer is no longer supported. About three in four Millennials (74 percent) and Generation Z consumers (72 percent) are willing to pay more for sustainable products and services, according to The Nielsen Company. For example, one study found Spanish consumers were willing to pay 22-37 per cent more for green products, but Japanese consumers were only willing to pay 8 per cent to 22 per cent more for . For example, plant-based is not a material issue in cereals, as most are plant-based; it is in detergents, where it means toxic chemicals are not used. World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use. You need a Statista Account for unlimited access. Ryan Rudomineris a principal at R2 Strategic Consulting where he specializes in strategic communications, advocacy, and media relations. Overall, consumers identified . For instance, while the overall shampoo category saw declines of 3.4% over a year long period ending April 2018, natural shampoos, which own 11.2% of the value share, are steadily growing at 2.2%. All rights reserved. Those that had no such commitment grew less than 1%. And its no longer just wealthy suburbanites in major markets willing to open their wallets for sustainable offerings. Nudge theory is used to understand how people think, make decisions and behave. But the results should be interpreted cautiously. According to Nielsen, 66% of all consumers are willing to pay more for sustainable brands. CPGs that are not making the pivot will lose Kraft Heinz, whose investors have encouraged a cost-cutting approach that is backfiring, is a case in point. Top Wellness Trends for Emerging Brands in 2023, Leading alcoholic beverage health and wellness trends in the US, The Value of Data and Insights: ROI for Emerging Brands, Do not sell or share my personal information. 2023 Nielsen Consumer LLC. When expanded it provides a list of search options that will switch the search inputs to match the current selection. Minds can be changed, laws can be changed, and companies can be changed. michele@greenprintcorp.com This is especially true for Millennials. Consumers expect more than ever from the brands they buy and increasingly are rewarding companies whose services and products are both good for them and good for society. Consumer concern about the environment does not readily translate into the purchase of environmentally friendly products. 1 Over 30,000 people in 60 countries were polled about their purchasing habits, and 66% of respondents said that they were willing to pay more for products and services from companies who are committed to positive social and environmental impact. Fifty percent of global consumers are willing to pay more for goods and services from companies that have implemented programs to give back to society, according to a new study from Nielsen. In the past year alone, sales of consumer goods from brands with a demonstrated commitment to sustainability have grown more than 4% globally, while those without grew less than 1%. I can attest to the fact that sustainability isn't just something I "sorta kinda" consider--it's one of the primary reasons I either buy or don't buy from consumer brands. Businesses must adapt to the times as consumers are voting with their wallets and Millennials, in particular, are demanding that companies put their money where their mouth is. The survey was fielded from February 15 to February 16, 2021 among a demographically balanced nationally representative sample of 1,017 U.S. adults 18 years of age and older. This is especially true for Millennials. Marketers, operators, and merchants need to take the following steps: one, penetrate the right segment; two, unlock what motivates that segment to spend money; and three, act on strategies that build loyalty through ongoing consumer engagement. Both are good tools for building trust. Our analysis looked at products on-pack communication about their sustainability. Pay more, waste less: 32% of consumers would pay more for a product from a brand that they believe is committed to sustainability. Deloitte. Brands that establish a reputation for social responsibility and environmental stewardship among todays youngest consumers have an opportunity to not only grow market share but build loyalty among the power-spending Millennials of tomorrow, too, says Farraj. In a free market economy, it is very difficult to force people to pay more for products. As expectations around sustainability climb, companies will face significant pressure to prove their sustainability credentials and continue to make it a central part of their value proposition., One third of consumers are willing to pay a premium for sustainable products, and companies should prepare for sustainability to become the expectation and not the exception in the future. Companies that dont have sustainability as part of their core value proposition need to act now to protect against future reputational impacts and loss of market share, said Shikha Jain, author of the study and Partner at Simon-Kucher & Partners. This study investigated consumers' Willingness To Pay (WTP) for dry semolina pasta produced with raw materials from more diversified agricultural systems and which factors influence this . Its about exploring your trustworthy methods of communication, then selecting one that aligns with your objectives.. 470-788-0718 "Share of consumers who were willing to pay more for sustainable goods in China as of November 2022, by category." Other key findings of GreenPrints Business of Sustainability Index include: This index and its future editions will track sentiment around sustainability in the economy how climate consciousness impacts consumer preference and perceptions of companies and their products, as well as the overall effectiveness of the sustainability benchmarking ecosystem across various sectors and demographics. It can be done. It is no secret that companies must be responsive to customer demands and expectations if they want to survive. Recent Study Reveals More Than a Third of Global Consumers Are Willing to Pay More for Sustainability as Demand Grows for Environmentally-Friendly Alternatives While attitudes vary across. Attitudes towards sustainability also vary by industry when measuring its importance as a purchase criterion, from 74 percent in Energy/utilities to 44 percent in Financial services. In 1998, the Council of the European Union passed a directive that setrules for the protection of farmed animals -- a directive updated in 2009 that led tofar more ethical treatment of animals there. According to a 2020 report by First Insight , 73% of Gen Z consumers surveyed were willing to pay more for sustainable products, more . Numberingmore than 80 millionstrong, Millennials already account for an estimated$1 trillionof U.S. current consumer spending. We examined over 36 categories and more than 71,000 SKUs, which accounted for 40% of CPG dollar sales over the five-year period. Commitment to either social value or the consumers community are also important (each influencing 43% and 41% of respondents, respectively). You need at least a Starter Account to use this feature. Green is the new black: why retailers want you to know about their green credentials, Speaking with: law professor Cass Sunstein, on why behavioural science is always nudging us. crivez un article et rejoignez une communaut de plus de 160 400 universitaires et chercheurs de 4 572 institutions. Theres a noticeable break between generations, with 71% and 66% of Millennials and Gen Z willing to do so, compared to only 50% Gen X, 46% of Boomers and 39% Silent Generation. In the US, this number is just over the global average at 61 percent. As consumers become increasingly aware of what they put in and on their bodies, theyre also interested in buyingand sometimes paying morefor products that simultaneously help the environment. Design Michele Koch "Despite the fact that Millennials are coming of age in one of the most difficult economic climates in the past 100 years, they continue to be most willing to pay extra for sustainable offerings--almost three-out-of-four respondents," says Nielsen. For years, brand managers have groused that consumers say they intend to buy sustainable products but dont actually buy them. According to Chicago-based Nielsen's 2019 "Protein Proliferation" report, 19% of consumers surveyed said that they intended to increase their consumption of meat and seafood more than any other protein group. This may give competitors of all sizes, the opportunity to build trust with the predominantly young, socially- conscious consumer looking for products that align with their values.. Third-party validation helps certify progress in the eyes of consumers, and the process of carbon offsetting which is easy to measure and communicate helps create tangible benchmarks. And how can we encourage people to make good choices? In burgeoning sustainability markets, however, natural and organic are paving the way for more detailed and specific claims. Even cross the minds of those shopping: why retailers want you to know about sustainability. Markets, however, that customers are becoming more canny remain unmoved by those facing increasingly poor living across... Economic Forum independent expert growth numbers, as many brands have become sustainable... Social media get access to background information and details about the environment has the power to product. Green consumption ( i.e to appeal to consumers, authenticity and credibility are.. Wisdom isnt true deeds is encouraged and expected by consumers, authenticity and credibility are essential mean! Products in the US, this number is just over the five-year period if... Dont actually buy them organic are paving the way for more detailed and specific claims Farms Makes Sheep Happier risk... Product.. 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